Survey Says: Financial Considerations Affecting College Choices

Featured Author:

Mark Kantrowitz

As a nationally recognized financial aid expert, Mark has been called to testify before Congress about student aid on several occasions.

He has served as a guest columnist for the New York Times and the Huffington Post and has been interviewed regularly by major news outlets, including the Wall Street Journal, USA Today, MSN, CNN, NBC, ABC, CBS, CNBC and more.

Mark is the author of five books, including three about student aid. His most recent book, Secrets to Winning a Scholarship, helps families find and win scholarships. He is also on the editorial board of the Council on Law in Higher Education and the editorial board of the Journal of Student Financial Aid, a member of the board of directors of the National Scholarship Providers Association and a member of the board of trustees of the Center for Excellence in Education.

Mark is ABD on a PhD in computer science from Carnegie Mellon University (CMU) and holds Bachelor of Science degrees in mathematics and philosophy from MIT and a Master of Science degree in computer science from CMU.

Sallie Mae and Gallup just released the results of a survey of how
American families pay for college. The survey found that families are
becoming more cost conscious in their college choices. Nevertheless,
the majority of families still see college as a necessary and
worthwhile investment in their children’s future.

Students from higher income families were more likely to enroll at
more expensive institutions. The average cost of attendance was
$23,817 for students from high-income families (earning more than
$100,000 a year), compared with $16,955 for students from low-income
families (earning less than $35,000 a year) and $17,383 for students
from middle-income families (earning $35,000 to $100,000 a
year). Income also affected the type of college. Students from
families earning less than $35,000 a year were more likely to enroll
at community colleges than students from families earning more than
$150,000 a year (27% versus 10%) and less likely to enroll at 4-year
private colleges (16% versus 35%).

There were also geographic differences in enrollment at more expensive
colleges. 45% of students from the northeast enrolled in private
4-year colleges, compared with 17% from the midwest, 14% from the
south and 13% from the west.

More affluent families were less likely to borrow. 24% of families
earning more than $150,000 borrowed, compared with 49% of families
earning less than $50,000, 45% of families earning $50,000 to $100,000
and 38% of families earning $100,000 to $150,000.

Overall, willingness to borrow declined as compared with the previous
year’s study. 53% of students said that they would rather borrow than
not attending college, compared with 67% last year. Still, education
loans enabled many students to enroll in college. If they didn’t
have access to student loans, one third (33%) would have delayed
enrollment or not attended this year.

Students from families that borrowed to pay for their education
attended more expensive colleges than students from families that did
not borrow for college. The average cost of attendance was $22,821 for
the students from families that borrowed, a third greater than the
$17,143 average among students from families that did not borrow. The
amount borrowed was almost half the cost of attendance. This suggests
that students were using debt to enable attendance at a more expensive
school (or conversely, that attendance at a more expensive college was
more likely to require borrowing).

The primary reasons for borrowing education loans as opposed to other
types of loans included a preferable interest rate (20%), convenience
(17%), availability (13%), and couldn’t borrow other types of loans (10%).
This compares with the use of credit cards to pay for school, where
the primary reasons included convenience (65%), emergency or unplanned
expenses (14%) and a preferable interest rate (4%).